Pain for Bloomsbury as books returned unsold
Book publisher Bloomsbury today offered a mixed view on trading today amid higher-than-expected UK book returns and a 'cooling' in the German market.
Shelved: The publisher is having more books returned unsold.
The group, which publishes JK Rowling's Harry Potter adventures, said retailers in the UK were sending back more unsold books than it had forecast.
Its domestic UK operation overall has performed in line with expectations since the start of the year, as has the US thanks to strong revenues from rights deals.
But Germany is seeing some titles struggle to reach sales targets, according to Bloomsbury.
It is looking to a boost in the second half of the year from a stronger programme of releases from major authors, such as John Irving, Margaret Atwood, William Boyd, Heston Blumenthal and Ben Schott being published this autumn.
'We are continuing to focus on managing our cost base in the light of the current difficult economic environment and are investing carefully in our future publishing programme,' added Bloomsbury.
It declined to provide further details on UK retailer book returns, but has previously cautioned over the impact of the recession on demand for books.
Dominic Buch, media analyst at Numis Securities, said book sales could come under pressure more than publishers expect.
'The industry makes the argument that book sales are not cyclical, but there will always be an element of discretionary spend - people buy books to go on holiday and at airports and travel has been impacted by the recession,' he said.
Bloomsbury has so far weathered the tough conditions, although profits have been impacted by the absence of any further Harry Potter instalments, following the final book in the series - Harry Potter and the Deathly Hallows - in 2007.
Annual pre-tax profits recently fell to £11.6m for the year to December 31, from £17.9m a year earlier, while sales dropped to £99.9m from £150.2m. However, it has been confident on life after Potter, with two of 2008's best-sellers - A Thousand Splendid Suns by Khaled Hosseini and The Tales of Beedle the Bard, by JK Rowling.
Its specialist publishing division is also benefiting from recent acquisitions, Bloomsbury said. The recently-bought Wisden Cricketers' Almanack is selling ahead of expectations and the overall division is trading 'well'.
Bloomsbury also hinted at further strategic takeovers in the recession, saying it was seeing an increasing number of 'company acquisition opportunities'.
But shares fell 2.5% today as Numis warned over takeovers: 'Whilst an enhancing acquisition would be a positive catalyst for the share price, we are generally cautious on consumer-facing, retail-exposed media.'
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